HAMBURG — Volkswagen Group CEO Herbert Diess will stay on in the role, the company said, ending weeks of uncertainty about his future as the automaker increased spending on electric cars to catch up with Tesla.
VW Group’s supervisory board presented its annual update to the company’s five-year investment plan on Thursday, outlining investments of 159 billion euros ($180 billion), up from 150 billion euros last year, and electrifying more of VW’s sites across Europe.
Spending for EVs will be raised by about 50 percent to nearly $59 billion, compared with last year’s blueprint, VW said. By 2026, about a quarter of all sales will be electric only, VW predicted.
“We are becoming a battery manufacturer, a charging infrastructure manager, software is playing a more dominant role … we are developing new business activities with an unbelievable dimension for us,” Diess said, adding the company expected to generate 20 billion euros of revenue by 2030 from its battery division alone.
In a nod to worker representatives keen to keep a strong power base at home, VW confirmed a plan to add a new electric car factory near its global headquarters in Wolfsburg. The site will produce some 250,000 vehicles as part of the Trinity project.
VW also reorganized its top leadership.
VW brand chief Ralf Brandstaetter will take over the group’s China business from Diess on Aug. 1. Skoda boss Thomas Schaefer will become VW brand CEO.
Diess will add responsibility for the company’s software unit Cariad, taking charge of the unit from Audi CEO Markus Duesmann.
VW also elevated Hildegard Wortmann from its Audi unit as new head of global sales for the group.
Manfred Döss will take over the group’s Integrity and Legal Affairs department from Hiltrud Werner on Feb. 1. Döss, a lawyer, has been head of the group’s legal division since 2016 and steered the company through its legal battles with U.S. authorities over its diesel emissions scandal.
Hauke Stars, former chief information officer of Deutsche Börse, will be the automaker’s new head of IT.
Diess said the reorganization of the leadership team will see the VW Group delegating management of individual car brands to focus on these overarching business areas.
Diess’s future had been in doubt following clashes with VW’s powerful labor unions.
“We have made important decisions and found good answers to make Volkswagen fit for the future,” supervisory board chairman Hans Dieter Poetsch said in a press conference following the announcements.
Diess acknowledged the difficult discussions by referring to an “intense process” in the run-up to today’s unveiling. At the same time, he said he never lost the desire to run the carmaker, calling the job “very close to my heart.”
Diess’ management and communication style angered the carmaker’s works council, prompting weeks of negotiations over his future at the automaker. Diess had warned of tens of thousands of possible job losses in coming years and frequently highlighting the threat of competition from Tesla.
At a news conference on Thursday, works council head Daniela Cavallo said it was happy with the outcome of negotiations.
“I have no interest for us to have these conflicts in public,” Cavallo said. “The conclusions of this planning round are clear: we have a solid and robust plan we can all be proud of.”
VW Group confirmed it expected its operating margin to be at the upper end of its 6 percent to 7.5 percent target range for 2021.
Bloomberg contributed to this report.
